This website is a collection of horror stories, news reports and other information addressing problems with Paypal, Inc..

PayPal Warning

While we do not have the resources to verify each and every complaint we receive, we do believe that all reports posted here are true based on our own experience with Paypal and the growing number of corroborating horror stories we receive every day. The main subject of the majority of these horror stories is the following:

Your Paypal account can be frozen at any time, without advance notice, leaving you without your money for months (if not forever), and there isn't much you can do about it.If you would like to submit your own PayPal horror story, we would be more than happy to post it for everyone to read, providing that it is truthful and void of inappropriate language. Please feel free to submit your story by clicking Here

How Does PayPal Make Money With My Money?

According to the San Francisco Chronicle, there are approx. 100,000 complaints outstanding at PayPal (Are any of these yours?). In many instances disputes can run on for months leaving people frustrated and out of pocket as they are unable to access their accounts. So what happens to the millions of dollars tied up in frozen accounts and disputes? Well, here is a clip from the San Francisco Chronicle that basically sums it up:

U.S. District Judge Jeremy Fogel of San Jose refused to dismiss a lawsuit that seeks class-action status on behalf of thousands of PayPal customers nationwide. A common allegation is that the company brushes off or stalls customer grievances for months and meanwhile freezes the customer's account and pockets the interest (So that's how they make their money!). No wonder they freeze so many accounts!

Customers Are Numbers

Writer Wishes To Remain Anonymous

I posted this comment in PayPal’s Developer Forum this evening. I expect it will be removed. I did not include a link to your site nor will I from my own site as I believe one site, yours, will do. I found you and others who are concerned will also if they are so inclined to investigate their partners adequately.

That said, here is a copy of the post:

When choosing an e-commerce solution that will utlimately reflect greatly on my site, one must investigate his/her partners thoroughly. The Internet is of much use in this regard as information is freely available.

In this case, I found this:

What We Expect from an Online Payment Service Things Paypal Can do to Fix all of This!

We have never been asked by Payal what they can do to fix all of this. But in case they were wondering…”communicate”

Quit treating customers like a number. You are playing with peoples money here! When you communicate with any customer, you should talk to them as if they are right in front of you and married to your sister. Walk into a bank on the corner. Heck, walk into Wallmart! How do they treat you? LEARN from that. Repeat after me: Every customer complaint is worth more than a grain of salt.

We realize the Internet is full of fraud. Paypal has every right to temporarily hold on to a transaction if they suspect fraud. But define temporary? How would you like it if your paycheck was frozen for four weeks without explanation? If you can’t positively identify fraud after 24 hours then you have no right to hold the money any longer and collect interest from it. Fix that. (reverse the transaction or complete it). Consider fully verifying a customers identity before doing business with them – not after. This will save many customers the heartache of frozen accounts. What happens if you go belly-up? A real bank would be insured by the federal government. You are not. Provide insurance to your customers or make it very clear that their funds are not insured against another dot com failure. We’re not talking adding an article 100, paragraph 10, section 3c of your terms of service. Spell it out very clearly when each customer signs up. Resolve every single horror story on the wall of shame. If the customer is in the wrong (we don’t know all the details) then pick up the phone and call them. Explain the situation to them. (remember the married to your sister part) The representative calling should not be from a call center. They should be fully able to resolve the situation, even if they discover facts during the conversation to show why Paypal should not have held on to the funds to begin with.

If someone has to wait more than five minutes to talk to a real person then you don’t have enough people answering the phone. If anyone answering your telephone is not fully qualified and able to handle most any situation on the spot, then you don’t have the right people answering the phone. Where is your phone number anyway? (except on THIS site)

and I found this

I’m a retired Monsignor with an Old Catholic Church and have been selling postcards on e-bay since January 1997. We raise small amounts of money to help support an Orphanage in Mexico and other charity programs. We joined PayPal over a year ago and found the service wonderful. When they issued us an ATM card it was even better as we used it to pay e-bay, and postal charges, etc.

For the past 6 months at various times money has been taken out of our account. We notified PayPal via their red carpet phone number and took their advise, changed our pass word, etc. We finally opened a new bank account with only $5.00 in it and got a secured credit card that was almost maxed out to keep PayPal from dipping into our funds.

Over the Thanksgiving holidays we were horrified to find PayPal was able to withdraw over $500 from our bank account with only $5.00 in it, they also tried to keep billing our credit card. When I called to report the unauthorized activity I was told if I made a complaint they would restrict our account. I made the complaint with our bank and the police department. PayPal immediately suspended our account, but continued to send e-mail to our buyers and collect money from them.

Today I am informed the following:

Thank you for contacting PayPal.

We have completed a thorough investigation of your case and have denied your Unauthorized Account Use Claim.

Also, we have terminated your further use of PayPal. This termination is per PayPal’s Terms of Use, Section V. Rights and Disclaimers of PayPal, number 4:

“Termination. PayPal, in its sole discretion, reserves the right to terminate this Agreement, access to its website, or access to Service without notice for any reason and at any time.”

Your account will remain locked indefinitely, and we ask that you not attempt to open a duplicate account, as any additional accounts will be locked from use as well.

We thank you for your business with PayPal.

They have hurt us bad, not only taking the money that is not theirs, but trying to ruin our reputation with the credit card company and our bank. We will make good on all the customers that paid through PayPal, but we operate on a very small budget, most our funds going to the kids, and this hurts bad.

In all my years, and I’m over 60, I have never seen an unregulated business that can literally get away with anything they want and don’t care who they hurt. I hope someone can shut them down and jail the owners.

After seeing this, I am afraid that I, SmartWebAgent, am afraid of PayPal’s ethics personally. I do, I suppose, wish the best to you all, but I am going to take my leave from the PayPal Development Community without further ado.

If I am wrong, I beg your pardon.

Either way, I have children to feed and my dream of owning my own software company must come true. I have only this one life and cannot play favorites…money has a way of making folks do things they probably never would have done if they were poor. Perhpas, I guess I just get along with the poor folks better?

Thank you for the opportunity nonetheless.

Respectfully,

SmartWebAgent

Thanks for taking the risk to inform the public at the risk of damaging your own.